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Building the Business 101: Never Getting Past Hello

Despite initial screenings, sometimes prospective clients choose to go elsewhere. The reasons vary, but they highlight how important it is for both the planner and client to find the right fit.

Veena A. Kutler and Annette F. Simon, 07/26/2007

This monthly series of articles describe the many steps and occasional missteps we have taken in building our financial advisory business, Garnet Group LLC. Currently, Garnet has eight staff members, more than 90 clients, $300 million in client net worth under advisement, and offices in Bethesda, Md., and Boston. Veena Kutler, CFA, and Annette Simon, CFP, are the principals managing the Garnet office in Bethesda.

In our May column, "Saying Goodbye to Clients", we wrote about clients who left our practice--either by our choice or by theirs. This month, in response to reader requests, we discuss prospective clients who met with us but did not become clients.

We've all had prospective client meetings that have not ended in new client relationships. Sometimes, during the preliminary phone screening it becomes obvious that there is no fit. At other times, the initial screens indicate a potential fit, but during a face-to-face introductory meeting, we feel a lack of chemistry or a mismatch between the expectations of the two parties. And there are prospective clients who appear to like us, to understand and want our service, but who decide against working with us. Often, this last group has left us scratching our heads wondering what went wrong.

Our Prospective Client Process
Regular readers of our column know we have adopted much of the E-myth philosophy;  whenever possible we develop systems and repeatable action sequences for handling recurring needs and events. Since we regularly receive phone and e-mail inquiries from new prospective clients, it only made sense to create a standardized method for managing  client qualification and sales (yes, we know "sales" is a dirty word). Our steps are:

1. Initial telephone screening
When potential clients call, our client service manager, Andrea, provides a brief description of our services and invites them to take a look at our Web site. She informs them that our client relationships include both asset management and financial planning and that generally clients use both these services. While we do not enforce a minimum asset level, we do have a minimum annual retainer fee that Andrea reveals to all prospective clients. She also helps them self-select by explaining that clients with a net worth of $x or more tend to derive the greatest value from working with Garnet. We helped Andrea develop a written script for this exchange. Over time she has become more familiar with the process, and she now handles these calls in a comfortable, conversational manner.

Often, this is as far as things go. The prospective client may say, for example, "$750,000! I wish I had that kind of money," or "I just wanted to work with someone for a couple of hours." If this is the case, we provide referrals to the find-a-planner section of the NAPFA Web site or to colleagues who provide the service they are seeking. The conversation ends efficiently on both sides. When there seems to be a possible fit, Andrea will forward the call to one of us (or schedule a time when we can call them back) for further screening.

2. Client questionnaire
We ask prospective clients to complete a three-page questionnaire prior our initial consultation meeting. Why? We don't charge for this first meeting, which often lasts one and a half to two hours. By gathering some general information ahead of time, we can often identify prospective clients who seem unlikely to benefit from our service. Further, this again allows clients who are not really motivated to work with an advisor (because it involves gathering data and focusing on their finances) to self-select.

3. Initial consultation meeting
Held in our conference room, this meeting provides an opportunity to get to know the client's personal and financial situations and hear the client's concerns. At the same time, we can tell the client about Garnet and our backgrounds, process, and philosophy; we end with an estimate of the annual retainer fee. As mentioned earlier, the meeting can be lengthy, but it provides an opportunity for both parties to get a good sense of the other and assess the fit between us.
4. Follow-up
Within a few weeks after the consultation, Andrea checks in with the prospective client to ask whether they have any unanswered questions. We follow up again a month later, informing the prospect that we hope to have the opportunity to work together but that we don't want to be annoying or intrusive, so we will not call again unless we hear from him or her.

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